A train filled with coal makes its way through the Midwest to the West Coast.

Exec order gives coal industry hope, but no new jobs

March 31, 2017

Mary Schimke | Energy Media Group

President Trump’s executive order signed Tuesday rolling back Obama-era policies probably won’t bring back coal industry jobs, but it could provide the industry some much-needed breathing room to continue working on ways to stay competitive in the ever-changing energy landscape.

President Trump signed his “Energy Independence” executive order surrounded by coal miners, who heard the President say many times throughout his campaign that he’d fight for the coal miners and for their industry, which has been slowly disappearing as cheaper energy sources, like natural gas, dominate the landscape.

“C’mon fellas. You know that this is?” Trump asked when he signed the order. “You know what this says? You’re going back to work.”

But despite the promise to put coal miners back to work, many industry analysts, and even some coal company executives, aren’t convinced that dismantling Obama’s Clean Power Plan that restricts carbon emissions created by coal-fired power plants will bring back jobs.

But reports of a dwindling coal industry isn’t new. In 1985, Richard H. K. Vietor wrote a study of business government relations titled Energy Policy in America Since 1945. He says:

By 1956, coal was a “sick industry” in more ways than one. Coal production had declined 39 percent from its peak in 1947; three thousand mines had closed, and the number of mine workers fell by nearly half. Coal’s share of the energy market had fallen by 18 percent, with no end in sight …

The low price of natural gas, “held below market-clearing levels by the Federal Power Commission,” was one of the factors to blame. Does this sound familiar? Abundant natural gas resources, combined with increasingly efficient natural gas plants, have been only a portion of the reason behind coal’s most recent decline that began in the mid 1990s.

Also cited in Vietor’s book as causes for coal’s decline were a low-tariff policy facilitated dumping of imported residual oil, an unfair doubled rated of domestic oil depletion allowance, and nuclear power subsidies (Vietor p. 163-164).

Today, as nuclear power’s popularity dwindles right next to coal, advocates for coal and other fossil fuels cry out against renewable subsides, like solar, instead. For example, a 2015 Orange County Register editorial cited that reason California became the first state to obtain 5 percent of its electricity from solar was due to its promotion of the technology through tax breaks and subsidies.

The point, however, is that despite Trump’s executive order, it’s unlikely that coal jobs will see a resurgence anytime soon. Robert W. Godby, energy economist at the University of Wyoming, said that mechanization of the industry will prevent many of the jobs from coming back, even if there is an increase in coal production.

Seeking Alpha, in analyzing Trump’s order, also said, “It will not achieve its stated objective of restoring coal mining jobs and coal companies to profitability. It is not an investable action.”

The order could help to maintain and preserve the industry as we see it today, though, and keep current coal operations from shutting down completely, even if it doesn’t spur a hiring craze to increase production. The executive order will allow companies time to prepare for future restrictions and develop efficient processes that will keep coal in competition with cheap natural gas and hot renewables.

“This is a much-needed pause,” Wade Boeshans, president and general manager of BNI Energy, told the Bismarck Tribune. “The [carbon] regulations were moving faster than the technology,” he said. “If the regulations came on tomorrow, we just wouldn’t be ready.” His comments

Basin Electric Power Cooperative CEO Paul Sukut told the Bismarck Tribune that President Trump’s announcement is a “positive step forward in our efforts to seek time and flexibility when it comes to developing a carbon management plan” that would include development of clean coal technologies.

Senator Heidi Heitkamp (D-ND) also stressed the importance for innovation and investment in clean coal technology in order to preserve the coal industry in North Dakota.

By continuing to create processes that reduce carbon emissions, the industry may have a better chance for longevity.

Yet, Jason Bohrer, head of the Lignite Energy Council, said that Obama’s Clean Power Plan is not the main reason they continued research in this area. With the removal of the Clean Power Plan’s regulations in Tuesday’s executive order, the Council, along with the Energy and Environmental Research Center (EERC) in Grand Forks and other state coal and power companies, will likely still continue to research clean coal technology. Research on the Allam Cycle, for example, doubles the electricity per ton of coal, and Allam Cycle plants have about a fifth of the carbon footprint of a combustion plant.

The coal industry’s game plan to remain competitive seems to be a good one, but it doesn’t mean that mining jobs will return in North Dakota, Wyoming, West Virginia or any other coal-producing state.

About Bakken.com

Bakken.com is owned and operated by Energy Media Group based in Fargo, North Dakota. Bakken.com was brought to life to fill a gap in the way that news was brought to the people in this specific energy niche.

Bakken.com is dedicated to providing news as well as local information on housing, jobs, entertainment, and resources for Western North Dakota.